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Why is Denmark Considered One of the Best Countries for Doing Business?

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The World Bank’s decision to continually rank Denmark as Europe’s best country for business is easily justifiable. It is a free-market capitalist economy with a flourishing business environment that welcomes all. According to the Doing Business organization, Denmark ranks 4th in the world and 1st in Europe for its ease of doing business.

In addition to its laws and regulations for supporting businesses, Denmark is also a great social welfare state with world-class programs to improve the standard of living for its citizens. To date, its social welfare policies are a model for the rest of the world, making it an ideal place for not just doing business but also living a great life.

In this article, we will go over all the reasons that make Denmark one of the best countries for doing business.

Safe Business Environment

Denmark has a minimal bureaucracy rate when it comes to the business industry. There is practically no corruption and bribery in the business activities. Its transparency index is one of the best in the world. With minimal bureaucracy, great education and transparent and strict tax laws, there is absolutely free trade of goods and services that attracts investors from all over the world.

The Most Professional Talent Pool

Denmark has one of the best talent pools in the world. Its individuals are incredibly qualified, educated, and multilingual, making it easy for foreigners to do business. 96% of the people in Denmark have secondary education and 47% of them complete their university education.  Moreover, their English proficiency is among the world’s top three. Four out of five people in Denmark speak English and half of them speak German, which is also one of the most spoken languages in the Europe.

Moreover, Denmark’s labor market is incredibly flexible and transparent, which is why it is quite easy to hire and fire employees.

World Class Innovation and Technology

Denmark houses the world’s most advanced infrastructure. Its transport system, buildings and business facilities are highly advanced and come with promised supply of electricity and water.

Moreover, since it has plenty of renewable energy, Denmark has more than 40 attractive policies to fuel the “cleantech” program. In fact, cleantech has become the country’s fastest growing sector.

According to the European Commission, Denmark is regarded as an innovation leader in Europe, thanks to its extensive research and development programs focus on innovation, entrepreneurship, and the intellectual pool of aspiring people.

The nation has over 12000 researchers, 14 top quality universities and 15 research parks. Its capital provides the most favorable environment in terms of knowledge and research.

Biotech and life science industries are the most developed among all in Denmark. It has the biggest cluster of biotech companies in the world. Moreover, it also specializes in food innovation that is renowned both nationally and internationally. Its food innovation programs focus on great hygiene and safety standards to ensure best quality of food, which is why you will find a lot of unique and innovative restaurants in the country.

High Focus on Reducing the Carbon Footprint

Denmark aims to reduce its carbon footprint by 70% by the end of 2030. Thanks to its cleantech program, all the companies in the country focus on minimizing their carbon footprint by adapting to sustainable operations and machinery.

The government is also keen on supporting these efforts and devising strict policies to stay focused. Denmark aims to be 100% independent of fossil fuels by the year 2050.

The Strategic Location of Copenhagen

Denmark’s capital, Copenhagen has a great geographic location that makes it favorable in terms of logistics. It connects Europe, Scandinavia, and the Baltic nations, creating a link to a market that has more than hundred million consumers. According to the World Airport Awards of 2015, the city’s main airport is known as the best airport of the region and is the busiest airport among all Scandinavian airports.

Quality of Life

Danish people are known as the happiest people in the world. Its capital, Copenhagen is one of Europe’s most beautiful cities with easy residence and work permits. If you start a business in Denmark, you can enjoy all of the welfare services that include absolutely free education and medical care. Its welfare programs are famous around the world. The nation’s capital, Copenhagen won the 2013 and 2014 awards of World’s most livable city, conducted by the International Magazine Monocle.

Denmark offers a great work-life balance. In addition to the free education and health services, the residents also get a child allowance until they are 18, maternity leaves and benefits, paid holidays for 30 working days, paid sick leaves, and insurance for unemployed people with 90% of previous salary for 2 years and university scholarships.

Low Business Costs

One of the reasons why Denmark has ease of doing business is because its cost of running businesses is low. Denmark has the lowest employer costs and social security rates in Europe. Its overhead costs like office rent are also quite cheaper than other trade cities in Europe. Moreover, its company tax rate is also very lower than any other European city. It stands at 22%.


What makes Denmark an ideal business location is the fact that its business and trade operations operate on the value of trust. They don’t just focus on selling products, but also providing value. You can literally take their word for anything. Business owners are extremely transparent and will provide information with great clarity. It is a part of their ethical code that even surprises WHO and other organizations in terms of the standards for international recruitment.

According to a survey conducted in Denmark, 70% of the Danish people believe that the Danes can be trusted. That’s why you will see that you are absolutely safe even in the streets. In fact, people leave their sleeping infants out on the streets while they dine in restaurants.

Solid Social System

Although Denmark’s social system runs on higher taxes, that in no way means that you are losing your money in taxes. You can trust their system with your tax money because that’s what fuels their world-class social network. You will absolutely get what you paid for.

The system also offers security to employees to not be affected by extensive globalization. It proactively manages globalization efforts in the country to keep the local businesses safe.


Danes enjoy an incredibly high standard of life. Their purchasing power parity is also extremely high. Its gross national product is one of the highest in the world. Its economy runs on trade, industries, and manufacturing, most of which are small enterprises. There is also a long-term trade relationship of Denmark with the Nordic countries and the UK. Its private sector contributes towards half of its income and most of its expenses are for the health and social services in the country, foreign affairs, national defense and economic affairs.

Political Landscape

Denmark is a constitutional monarch country that focuses greatly on economic reforms. It is a very stable democracy that has minority governments. Most of its political efforts are to ensure the competitiveness of the country’s economy.

All of these factors, and more, are why Denmark sees massive foreign investments. Most multinational companies have their regional offices in Denmark to benefit from the nation’s favorable business landscape.

Therefore, if you are planning your business expansion to Denmark, here’s what you should do:

How to Expand Your Business to Denmark

Conduct Market Research

The first step towards expanding business to any international country is to conduct a feasibility analysis first. Although Denmark is an enabling nation for businesses, you should still get in touch with a market research specialist and get a feasibility analysis done. Because you need to understand the demand of your product/service in the country, know about the competition, and understand how the locals would receive your product.

Study its Laws and Regulations

In order to conduct business in Denmark, you would need to religiously study their laws and regulations for businesses, labor and the limitations for foreign investors. You will need to learn about their tax system and how it works. Moreover, search about any trade barriers that might be in the country and if there are any products that are prohibited in the country.

Hire Local Employees

Hiring locals would be challenging yet essential for your business. You don’t need to worry much about the language barriers though because Danes are multilingual and fluent in English. However, hiring them can be quite consuming. We recommend outsourcing the recruitment and managing process to an HR firm. They will make sure to comply with all the payroll complications and train the employees about your business.

Consult with Local Marketing Firms

Launching a business in a foreign country requires a solid launching strategy. You need to come up with great marketing campaigns and might even need to rebrand your product and service to cater to the new market. Getting in touch with a Danish marketing agency would help greatly. Apart from creating culture-relevant marketing content, they will make sure that your brand message is delivered in the right context.

Moreover, they would also be more familiar with the logistic aspects of marketing. They would know about the ideal spots for both traditional and digital marketing activities.

Get in Touch with a Compliance Partner

A compliance partner makes sure that your corporate establishment in a foreign country is done the right way. They help you establish and maintain your new business in the new country by complying with all the laws, regulations and informing you if you are doing everything right. They will also help you effectively manage your local employees and deal with their payrolls.

Another aspect that is crucial for businesses operating in foreign countries is all the essential documentation. You will need to create and maintain the documents to show to the authorities (if needed by their laws). All of those documents would need to be translated in the official language of the country. The translation has to be literal and not misleading. Therefore, a compliance partner would make sure that your documents are adequately translated in the official language. They will also help you with any marketing copies that need translation.

Final Word

Denmark is one of the best countries for doing business. And if you are planning your next expansion, this country should be on your list. Because not only would you benefit from the enabling business environment, but also get to enjoy a quality of life that is exemplary in the entire world.

But before you go ahead and start a business in Denmark, make sure you take all the due diligence. Be sure to get in touch with a compliance partner who will tell you everything about what’s needed and what’s not. They can prove really helpful in international expansions and ensure a smooth transition to another country.

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